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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. Z is a medium-sized UK based accounting practice. Z operates a graduate training scheme. The trainees are given an induction and then placed on a three-year training programme designed to help develop professional skills and experience.
The training programme has been in existence for many years. However, there is no clear consensus amongst the partners of Z about what the trainees should be able to do on completion of the programme and therefore what the training programme should emphasize. This lack of clarity is affecting the morale and commitment of the trainees and significant numbers are failing the programme or leaving to join a rival firm.
Z's HR Department recognizes the need for committed and well motivated accountants to meet the increased expectations of clients and the competition from rival firms. The HR Department has identified changes to the training programme that can be implemented gradually through a series of initiatives.
Which TWO of the following statements regarding the change required in Z are correct? (Choose two.)

A) The change would be classified as a 'revolutionary change' according to Balogum and Hope Hailey.
B) The need to manage the competitive position is an example of an 'external direct trigger' for change.
C) Understanding which day-to-day behaviors to reinforce within the training programme, is about 'routines and rituals' according to the Cultural Web.
D) The plans to combat competition would be considered as a 'structure' factor according to the McKinsey 7 S model.
E) The skills, abilities and competences of the organization's employee's are a 'hard' factor according to the McKinsey 7 S model.

2. Directors have a duty to shareholders and other stakeholders and are required to promote the success of the company.
Which THREE of the following are valid roles and responsibilities of directors? (Choose three.)

A) To have regard for the interests of the company's employees.
B) To focus only on maximizing company profits.
C) To avoid conflicts of interest and of duties.
D) To be responsible for keeping all external stakeholders satisfied.
E) To consider the likely consequences of any decision in the long term.

3. RST is a company specializing in the production of wood-based products. RST has decided to introduce a fully integrated Information System across all divisions in order to improve knowledge sharing throughout the business and enhance customer relationship management.
RST is expecting resistance to the integrated Information System from it's staff who are key to the business and would be difficult to replace. Staff have a good understanding of why the new system and knowledge sharing is needed and how the system will work but many staff are not happy about the potential changes to their working conditions.
Which of the following change leadership styles, as outlined by Kotter and Schlesinger, would be most appropriate for RST to adopt?

A) Manipulation
B) Education
C) Coercion
D) Negotiation

4. Company CCC is an automotive component manufacturer. It manufactures three main products within its portfolio:
Product 1: Relative market share of 0.1; Market growth rate of -2%
Product 2: Relative market share of 4.0; Market growth rate of +3%
Product 3: Relative market share of 0.3; Market growth rate of +15%
Which TWO of the following statements are CORRECT? (Choose two.)

A) Product 2 is likely to be at the mature stage of its life cycle, is likely to benefit from significant economies of scale.
B) Product 3 is likely to be at the growth stage of its life cycle, at high risk of failure and further investment should be considered.
C) Product 1 is likely to be at the mature stage of its life cycle, operating in a contracting market and is fairly cash neutral.
D) Product 1 is likely to be at the mature stage of its life cycle, have strong profitability and further investment should be considered.
E) Product 2 is likely to be at the growth stage of its life cycle, have weak profitability, poor cash generation and high capital requirements.

5. Which of the following statements is NOT a role for Management Accountants involved in the strategy development process?

A) Integration of financial and non-financial information.
B) Writing the Annual Report.
C) Assist the Board in determining risk appetite.
D) Consider and raise awareness of the ethical impact of proposed strategic decisions.

Solutions: